Statistical forecasting algorithms
On this page we'll show you what Prophecy™ has got to offer in terms of statistical sales forecasting. Prophecy™ offers much more than statistical sales forecasting. But, if you are interested in Prophecy's statistical sales forecasting options, this page is for you!
Supported Statistical Forecasting Algorithms in Prophecy.
Prophecy™ supports the following time series forecasting methods:
Linear Regression: A linear regression analysis draws a straight line of best fit through the historical sales.
Exponential Regression :Similar to linear regression, but works with the logarithms of sales, resulting in a ‘bendy’ line.
Holt Winters : An extension of the exponential smoothing method. Consists of an exponentially smoothed component and a trend component. This method is claimed by statisticians to better reflect long term trends than simple exponential smoothing techniques.
Last Yr + YOY% : This method is proprietary to Prophecy and takes the actual sale for each period in the previous year, and increases/reduces it by the latest complete year over year (‘YOY’) percentage. This is a simple method for populating a new year with data, where the peaks and troughs in the forecast can be clearly understood by matching them to the corresponding period in the previous year and it also reflects the most recent year on year trend.
How Prophecy™ Uses Its Statistical Forecasting Engine
Prophecy™ make the sales forecaster fully responsible for their forecasts and statistics is just one tool they can use to help them develop more defensible sales forecasts. Therefore the 'engine' appears in several places in Prophecy, but the human forecaster is always fully involved in applying or not applying the results.
'Batch mode' statistical forecasting
Batch forecasting is the closest to how other sales forecasting solutions deliver statistical forecasting - i.e. select a batch of product / customer combinations and generate statistical forecasts for them all, via a guided 'Wizard':
The Batch Statistics Wizard has 8 steps, allowing you to automatically exclude outliers, discard forecasts where the test interval MAPE is outside a set limit, reject negative forecasts etc..
The 'Tournament Mode' option forecasts the most recent <n> periods, using all the remaining history and chooses the method that has the lowest MAPE over the test interval.
'On demand' statistical forecasting
This option lets the forecaster see a statistical forecast for the item at the current cursor position in their Prophecy forecast update and report screen in a separate window. The window is refreshed in real time for the item at the cursor position as the forecaster navigates from cell to cell in their main Prophecy forecasting report screen.
Forecasters can compare their current forecast with the statistical forecast and decide to replace some or all of the current forecasts with the statistical forecasts.